Sovereign Wealth Funds Briefing - Archive | October, 2013

Zimbabwe plans to craft a law to set up a sovereign wealth fund by next February - but it may not have any money at first as the government desperately needs to develop the country’s crumbling infrastructure, the finance minister said.
Patrick Chinamasa also said on Wednesday that the government would consider a first international bond issue to help finance its mining sector. The southern African country has previously said it wanted to create a sovereign wealth fund to buy shares in foreign-owned companies, including mines, under President Robert Mugabe’s controversial black economic empowerment programme……………………………..Full Article: Source

Qatar’s $100 billion sovereign wealth fund is reportedly considering impact investment – a strategy that balances social or environmental objectives with financial returns.
The investment arm of Qatar Investment Authority (QIA), Qatar Holdings, is thought to have invested around $30 billion during the course of 2012. Reports now suggest that a proportion of this will now be used to deliver social and environmental improvements as well as financial returns……………………………..Full Article: Source

Qatar’s sovereign wealth fund, the Qatar Investment Authority, owns Bank of America Corp. (BAC) shares worth about $1 billion, the Financial Times reported Wednesday. The fund’s Qatar Holding arm began buying shares about two years ago and bought more last year when the stock price was in the $7 to $8 range, the FT reported, citing a person close to the fund.
Bank of America shares closed Wednesday at $14.17, up 2 cents. The FT report noted that the stake, which represents less than a 1% interest, falls below the 5% level that would require disclosure under U.S. regulations……………………………..Full Article: Source

Singapore’s Government Investment Corporation is looking at making a major debt play in Australia that could see it provide finance to developer Terry Agnew secured against the landmark $300 million Northpoint complex that dominates the North Sydney skyline.
The debt play could give the Singaporean giant, which has one of Australia’s largest direct property portfolios as well as stakes in listed trusts, further exposure to a local property debt as it has already invested $200m in the sector through Challenger……………………………..Full Article: Source

GIC Pte. Ltd., Singapore’s sovereign wealth fund, said Wednesday it is buying an office tower under development in Jakarta by Indonesian conglomerate Rajawali Group.
GIC didn’t disclose the cost of the acquisition. The 47-floor tower would be located in the Indonesian capital’s central business district, and comprise international grade-A office space, the sovereign wealth fund said in a joint statement with Rajawali……………………………..Full Article: Source

The Republic’s sovereign wealth fund GIC is buying a Grade A office tower under development in Jakarta’s central business district, adding to its portfolio of assets in South-east Asia’s largest economy.
The 47-storey building is part of a mixed-use development being built by Indonesian conglomerate Rajawali Group and due for completion at the end of 2015. The property includes an arm of The St Regis Hotel and retail podium for food-and-beverage outlets……………………………..Full Article: Source

Pavilion Energy Pte, the liquefied natural gas unit of Singapore’s state-owned investment company, made its first long-term deal with a European supplier. Pavilion Energy, owned by Temasek Holdings Pte, will receive 500,000 metric tons a year of LNG for 10 years starting in 2018, the company said in an e-mail, without identifying the seller.
The contract is with “a major European oil and gas multinational” for delivery into Singapore and the region, Chief Executive Seah Moon Ming said in a speech at a conference in the city-state……………………………..Full Article: Source

Malaysia’s state investment arm Khazanah Nasional Bhd is due to officially open its fourth overseas office in Istanbul today, managing director Tan Sri Azman Mokhtar said late Tuesday here. The office which will facilitate Khazanah’s exposure into the Middle East and African countries, will be officiated by Turkish deputy Prime Minister Ali Babacan.
Azman said Khazanah’s first area of investment has always been in the Asian region but Turkey and Africa, which he said are Khazanah’s second focus area have always been on its radar for quite some time……………………………..Full Article: Source

New Zealand Superannuation Fund has returned an average of 9.13% in each year of its 10-year existence, new figures reveal. The returns are before tax after costs, says the fund’s manager, the Guardians of New Zealand Superannuation.
As at September 30, the fund was worth $23.93 billion. It has also paid $3.3 billion in New Zealand tax over the 10 years, including $980 million during the past 12 months. Guardians chairman Gavin Walker says the fund is comfortably ahead of its key performance benchmarks and it has beaten the government’s cost of debt over the decade by 4.26% a year, or $6.96 billion……………………………..Full Article: Source

Figures released last week by the Future Fund revealed it was outperforming the most aggressive of Australia’s pool super funds and was on track to reach its target of $140 billion a year early, in 2019.
The Australian reported the fund – intended to pay for defined benefit pensions to commonwealth public servants – “had beaten conventional super funds holding 100% growth assets by a handsome margin, even though it is widely invested in longer-term assets such as infrastructure and timber plantations”……………………………..Full Article: Source

Norway’s central bank Governor Oeystein Olsen urged lawmakers not to spend more than 3 percent of the nation’s oil fund as the new government reworks next year’s budget.
Norway, which uses oil money to plug its budget deficits, caps the spending at 4 percent of its $810 billion sovereign wealth fund to avoid overheating the economy. Olsen already in 2012 said 4 percent was too much, as the rule he helped design last decade is being undermined by the surging size of the fund……………………………..Full Article: Source

The Government of India, according to press reports, is considering approaching sovereign wealth funds (SWFs) to invest in India. This is an interesting idea that needs to be examined closely. In the recent financial crisis, SWFs are known to have played a stabilising role but that has not been their historical image.
In fact, the threats posed by the SWFs and their intentions were characterised by the attempted purchase of US ports by a Dubai-based company in 2006 and expansion in Europe by Russia’s Gazprom. These attempts alarmed policymakers in advanced countries…………………………………….Full Article: Source

Norway’s oil fund is looking at increasing its property investment, especially in the United States, says its Chief Executive. The head of Norway’s oil fund, the largest Sovereign Wealth Fund its kind in the world, says it is looking to increase its investment in property.
Yngve Slyngstad, Chief Executive of Norges Bank Investment Management, says property investments currently account for up to 5% of the fund. But after increasing the size of its team it was now in a position to further build its property portfolio…………………………………….Full Article: Source

Lagos State Governor, Mr. Babatunde Fashola (SAN) Monday reiterated his opposition to the operation of the Nigeria Sovereign Investment Authority (NSIA), better known as the Sovereign Wealth Fund (SWF), noting that the federal government under the 1999 Constitution lacked the powers to save on behalf of the state governments.
The governor added that the SWF, which the NSIA was set up to manage on behalf of state and local governments, was a flagrant violation of the section 162 of the 1999 Constitution. He utterly differed on the establishment of the fund and NSIA while addressing the authority’s Chairman, Mr. Mahey Rasheed and Managing Director, Mr. Uche Kalu during a visit to the governor at the State House, Ikeja, to handover the state’s share certificate showing its ownership of the fund…………………………………….Full Article: Source

The creation of the Sovereign Wealth Fund by the Federal Government, has received commendation from International development partners. Chairman of the Nigerian Sovereign Investment Authority, Mr Mahey Rasheed , stated this when he paid a courtesy visit on the Lagos state governor in southern Nigeria, Mr. Babatunde Fashola.
He said the Fund had been recognised and rated high by Germany’s Investment forum, the UK Development For International Development and the International Monetary Fund (IMF) among others. Mr. Rasheed, said the fund had employed the best brains in the country to oversee and administer its various investments portfolios abroad…………………………………….Full Article: Source

Lagos State Governor, Mr. Babatunde Fashola (SAN), Monday lamented that the Sovereign Wealth initiative was unconstitutional, noting that he would receive the Shareholders Certificate of the Fund presented to him by the management of the fund only as an acknowledgement that the state’s fund was being held somewhere.
In his remarks while welcoming officials of the Nigeria Sovereign Wealth Authority led by their Chairman, Mr. Mahey Rasheed, Governor Fashola said although he would accept the Certificate as an acknowledgement that the State’s money was somewhere, it was necessary to put on record that he never supported the initiative…………………………………….Full Article: Source

Qatar’s sovereign wealth fund is looking at more investments in emerging markets in order to diversify beyond developed nations, said a senior executive of Credit Suisse who is one of the top advisers to the fund.
With assets estimated by analysts at about $100-200bn, and over a dozen potential deals on its radar every week, Qatar Investment Authority (QIA) is courted by bankers and politicians around the world…………………………………….Full Article: Source

Qatar’s sovereign wealth fund is looking at more investments in emerging markets in order to diversify beyond developed nations, said a senior executive of Credit Suisse who is one of the top advisors to the fund.
With assets estimated by analysts at about $100-200 billion, and over a dozen potential deals on its radar every week, Qatar Investment Authority (QIA) is courted by bankers and politicians around the world………………………………………..Full Article: Source

Qatar’s $100bln sovereign wealth fund has sought to soften its image as an aggressive acquirer of trophy assets by putting money into so-called impact investment schemes with social or environmental objectives.
The Gulf state has earned a reputation as a trophy hunter in recent years, partly because of its high-profile property investments, including its £1.5bn purchase of London’s Harrods department store in 2010………………………………………..Full Article: Source

Kuwait Investment Authority (KIA), the Gulf state’s sovereign wealth fund, has appointed a head for its newly-created infrastructure arm, seeking to bolster its investments in the sector, two sources familiar with the matter said.
Hakim Drissi-Kaitouni, previously a vice president at Bank of America Merrill Lynch in London, has joined as a managing director of Wren House Infrastructure Management, a fully-owned unit of KIA, the sources said, speaking on condition of anonymity as the matter is not public………………………………………..Full Article: Source

Qatar Telecom (Qtel) is set to control more than 90 percent of Kuwait’s Wataniya after the Gulf state’s sovereign wealth fund tendered its entire stake in the unit, two sources familiar with the situation said on Saturday. Qtel, which operates in 16 countries across the Middle East, Africa and Asia, offered $2.2 billion in August for the 47.5 percent of Wataniya it does not already own.
The tender offer expired on October 4. Kuwait Investment Authority (KIA), one of the world’s largest sovereign wealth funds with about $300 billion in assets, is currently the second biggest shareholder in Wataniya, with a stake of 23.5 percent. “The KIA has decided to tender its full stake………………………………………..Full Article: Source

Governor Babatunde Fashola of Lagos State denounced the move by the Federal Government to inaugurate the Sovereign Wealth Fund, SWF, stressing that it negates the country’s constitution.“The 1999 Constitution does not allow us to do what we are doing,” Fashola said.
It will be recalled that, a month ago, President Goodluck Jonathan inaugurated the council of the Nigerian Sovereign Investment Authority, NSIA, also known as SWF, where he canvassed for the support of the contributors, to realise the set objective of the fund………………………………………..Full Article: Source

Alrosa, the Russian diamond monopoly, has raised $1.3bn in a Moscow public offering as the Russian government pushes forward with its $15bn privatisation programme. The offering was backed by US funds including Oppenheimer and Lazard, as well as the Russian Direct Investment Fund, Russia’s $10bn sovereign wealth fund.
Olga Dergunova, director of Russia’s Federal Property Management Agency defended the involvement of state-backed RDIF in a privatisation deal. RDIF helped “in attracting investors to come to the book . . . The name [RDIF] is really attractive,” Ms Dergunova said. She added that RDIF had bought a relatively small portion of the offering. According to the fund, it bought the stake alongside “a consortium of foreign institutional investors from North America, Middle East, Western and Northern Europe and Southeast Asia”………………………………………..Full Article: Source

Subject to formal agreement from the ANZ board, the bank will appoint David Gonski its next chairman towards the middle of next year. The move opens the way for former treasurer Peter Costello to take the chair of the Future Fund, although this would entail some political risks and also threaten to destabilise the present smooth-running operation at the fund.
No decision will be made before today’s ANZ profit release, in which the bank is expected to report a better-than-expected profit underlined by a boost in full year dividends to at least $1.63 a share………………………………………..Full Article: Source

Future Fund chairman David Gonski could well stay in his role at the wealth fund if, as expected, he is shortly anointed as ANZs new chairman. It is understood Mr Gonski has canvassed colleagues on the possibility of holding both positions, and the colleagues see no conflict given the Future Fund has a very specific mandate to safeguard its assets, which has no real impact on ANZ’s banking and financial services businesses.
The ANZ board will shortly consider Mr Gonski’s appointment. The high-profile businessman has privately indicated he is keen to take the job………………………………………..Full Article: Source

The RM10.2 billion DUO project, to be developed by Malaysia’s and Singapore’s sovereign wealth funds, Khazanah Nasional Bhd and Temasek Holdings Pte Ltd is set to boost the Bugis district in Singapore.
The project, which is currently being undertaken by M+S Pte Ltd, a 60-40 joint venture between Khazanah and Temasek, is situated strategically along the Beach Road-Ophir Rochor corridor and is the centrepiece of the Urban Redevelopment Authority’s (URA) initiative to rejuvenate the area………………………………………..Full Article: Source

Norway’s $810 billion sovereign wealth fund, one of the world’s biggest investors, will increase its investments in China by 50 percent to $1.5 billion and would like to do even more, its chief executive told Reuters.
The head of the fund, a major investor in Google, Starbucks and Apple, also said on Friday he would not take up the issue of tax avoidance with the firms it invests in, despite the fund’s ethical profile. The fund, which invests Norway’s vast surplus of oil money, is the world’s richest sovereign wealth fund and holds about 1 percent of all global equities………………………………………..Full Article: Source

Norway’s sovereign wealth fund, the world’s largest, warned that stock-market gains may reverse as Europe’s biggest equity investor said it won’t use new inflows to buy more shares.
“Our share in the stock market has been stable or falling even though markets are rising, and that means in practice that we’re not using inflows to buy stocks,” Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, said at a press conference today in Oslo. The fund is preparing for a “correction” in stock prices, he said………………………………………..Full Article: Source

Ex Chairman of the Central Bank Mr. Gregory Marchenko in his interview for Delovoi Kazakhstan (“Business Kazakhstan”), voiced reasons behind excessively protracted merger of pension funds into a single pension fund.
“I believe the process of swapping stakes in the three biggest pension funds [in exchange for stakes in government-owned banks] between the funds’ shareholders and Samruk-Kazyna Sovereign Wealth Fund is unjustifiably protracted as shareholders of these pension funds have lost their business”, Mr. Marchenko said………………………………………..Full Article: Source

The Singapore government is Royal Mail’s second biggest private owner. Mega-rich GIC now owns a 4.1% stake of the privatised postal giant, worth nearly £230million. It follows revelations that an aggressive hedge fund, TCI, had become the biggest private shareholder in the firm.
Confirmation of the latest big money investor to snap up a major chunk of the firm came as a top analyst valued Royal Mail at £5.7billion – £2.4bn more than the Government’s ill-fated estimate………………………………………..Full Article: Source

Future Fund chairman David Gonski is set to be the next chairman of ANZ, subject to board approval, with the appointment to take place next year. Present ANZ chairman John Morschel is understood to have made clear to the board he is keen to step down as soon as a replacement can be found.
Mr Gonski has been sounded out to test his availability – the bank is seeking a candidate with experience of Asia as it pushes ahead with a focus on the region – and has said he would be keen to take the job if the bank’s board decided to appoint him………………………………………..Full Article: Source

The Selangor state government is planning to set up a RM1 billion sovereign wealth fund as a way to develop its major urban centres like Petaling Jaya and Klang into “worldclass” cities.
The Selangor Urban Development Fund will raise part of the money from private sector businesses in real estate and infrastructure development by leveraging assets like state-owned land. The fund will be parked under the state’s Mentri Besar Inc. Selangor Menteri Besar Khalid Ibrahim revealed the plan in Johor while presenting a paper at the Future of Urban Living Conference in Iskandar………………………………………..Full Article: Source

Sandalwood producer TFS Corporation has received about $49 million from a Middle Eastern sovereign wealth fund to plant 595 hectares of Indian sandalwood at a new plantation in the Northern Territory. It is the fourth investment by the Middle eastern wealth fund in TFS’s sandalwood plantations.
“TFS welcomes the positive and ongoing support of our foundation Middle Eastern investor as the company transitions to being a major global producer of Indian sandalwood with over 7,600 hectares now established across Western Australia, Northern Territory and Queensland,” TFS chief executive Frank Wilson said………………………………………..Full Article: Source

Sharia investing is again picking up momentum in the Gulf after almost five years of shrinking investor interest, said Jahangir Aka, head of SEI Middle East, pointing out that sharia-compliant banking continues to maintain strong growth in the Middle East.
“The SWFs in the region continue to maintain a very focused and disciplined approach to diversifying the “savings” of the country to ensure returns over the long-term. They have departments that are opportunistic in taking advantage of market dislocations and unique opportunities, but again that is part of a pre-approved budget and asset allocation,” he pointed out………………………………………..Full Article: Source

The Kuwait Investment Authority is rumored to have approached British Land Co. Plc with a £8.99 billion, or £9-per-share, cash bid, The (U.K.) Daily Mail reported Oct. 24. The deal would value the company at £6.2 billion, according to the report.
J.P. Morgan Cazenove analysts Harm Meijer, Tim Leckie, Neil Green and Annelies Vermeulen said in their daily Property Ticker briefing that a deal is “unlikely.”……………………………………….Full Article: Source

New Zealand’s Superannuation Fund said on Friday it had entered a conditional agreement to buy a 17 percent stake in retirement village operator Metlifecare for NZ$126 million ($105.11 million). Under the agreement, the fund would buy shares for NZ$3.53 per share, and take the fund’s total holding of the company to 19.9 percent.
The announcement follows a statement by New Zealand infrastructure investor Infratil Ltd earlier in the day that it would buy a 19.9 percent stake in Metlifecare………………………………………..Full Article: Source

India will approach sovereign wealth funds to invest in government securities as it draws up a plan to counter outflows when the U.S. Federal Reserve starts tapering its stimulus.
The government plans to meet officials of sovereign wealth funds based in Australia and West Asia, the official, who asked not to be identified before a public announcement, told reporters. The investment will be sought in the underutilized portion of the $5 billion reserved for such investors………………………………………..Full Article: Source

Sovereign wealth funds would be approached to invest in government securities. This is one of the strategies to prepare India for the effects of the US Fed withdrawing the quantitative easing in that country. Finance minister P Chidambaram on Thursday asked financial sector regulators to draw up plans to counter outflows when the US begins to taper the quantitative easing early next year.
A finance ministry official said the government plans meet to sovereign wealth fund managers based in Australia and West Asia. The investment would be sought in the underutilised portion of the $5 billion reserved for such investors………………………………………..Full Article: Source

America needs at least $8.2 trillion to keep energy, water and transportation infrastructure in a good state of repair between now and 2030, according to a new report by the US Chamber of Commerce. The best way to cover that gargantuan expense? Investment from China.
In the UK, Chinese investors can own majority stakes in future nuclear plants. The country’s sovereign wealth fund, China Investment Corporation, (CIC) also owns 9% of the company that controls the UK’s largest water and sewage company. In the US, CIC owns a minority stake in EIG Global Energy Partners, an asset manager that invests in energy and resources-related infrastructure………………………………………..Full Article: Source

Malaysian government investment arm Khazanah Nasional has demanded for an apology from a news portal for two articles implying it failed to respond to a letter or queries from the Auditor-General over operations and investments.
It said in a statement that there was no such letter or request from the A-G and they had always responded to queries in a professional and timely manner. Khazanah added that The Malaysian Insider did not contact them on the veracity of the claims in its articles “Parliament’s bipartisan oversight panel probes Khazanah’s costly ventures” and “PAC siasat perbelanjaan melampau Khazanah.”……………………………………….Full Article: Source

Public Accounts Committee (PAC) has instructed the Auditor-General’s Office to get Khazanah Nasional Berhad to explain several of its ventures which went bust. “We had a meeting earlier with the deputy auditor-general (Anwari Suri). The recent audit done on Khazanah was limited.
“But recently, the media reported that some of Khazanah’s ventures did not turn out well. So we will ask the agency to give an official answer,” said PAC chairman Nur Jazlan Mohamed………………………………………..Full Article: Source

British Land’s shares were suddenly hot property as rumours of a £8.99billion or £9 a share cash bid from a sovereign wealth fund swept dealing rooms just before lunch. They were chased up to 629p before closing 10p higher at 623p, currently valuing London’s biggest landlord at £6.2billion.
GIC, one of the world’s largest sovereign wealth funds, has been a long-term holder of a 3.95 per cent stake, but the Kuwait Investment Authority was the name in the frame. It is the country’s sovereign wealth fund and has doubled its investment in the UK over the past ten years to more than £15billion………………………………………..Full Article: Source

Sovereign wealth funds have flocked to hedge funds in recent years—but not that of Oman. The oil-rich Arabian country’s US$6 billion Oman Investment Fund plans to invest in emerging market stocks and real-estate in stable countries, but won’t be hiring any hedge funds.
In his first interview in at least seven years, OIF CEO Hassan Al Nabhani told Bloomberg News, “hedge funds are not transparent enough in their strategies and the risk they take do not compensate for the returns and the fees they charge.”……………………………………….Full Article: Source

The Alaska Permanent Fund returned 4.6 percent for the first quarter of fiscal year 2014, and increased in value by $2.2 billion from the start of the fiscal year to reach $47.0 billion, according to unaudited figures released by the Corporation. The Fund’s investments were positioned more conservatively (and assumed less risk) than the composite performance benchmark, and as a result lagged the benchmark return of 5.7 percent for the period ending September 30.
The Fund’s stock portfolios, which comprised close to half the Fund’s investments, drove the positive performance for the quarter. The U.S. portfolio returned 8.3 percent, while the Non-U.S and global portfolios gained 8.8 and 8.0 percent respectively………………………………………..Full Article: Source

The construction works of new building of the State Oil Fund of Azerbaijan are on the point of completing. Height of the building is 127 meters and it will consist of 23 floors. Two floors are considered for parking.
Spokesman of AS Group Investment, which constructs official building of SOFAZ, Elchin Niyazov, told APA-Economics that these construction works are being carried out jointly with Besiks Group (Belgium). He noted that he construction works will be completed at the beginning of next year………………………………………..Full Article: Source

Oman, the largest oil producer in the Arabian Peninsula that’s not a member of OPEC, said it’s shunning hedge funds and alternative assets to invest directly in emerging market equities and real estate in stable countries.
Oman Investment Fund, the sovereign wealth fund, manages almost all its assets internally and would only consider external managers because it could be “resource-intensive” to follow hundreds of stocks on a daily basis, Chief Executive Officer Hassan Al Nabhani said in an e-mailed response to questions, his first such interview in at least seven years………………………………………..Full Article: Source

Qatari and Kuwaiti sovereign wealth funds are in talks to take a stake of up to 15pc in EDF ’s £16bn nuclear power plant project at Hinkley Point in Somerset, it has emerged.
On Monday the French energy giant signed a landmark deal with the government over billions of pounds of subsidies for the plant, which would be Britain’s first new nuclear power plant in a generation………………………………………..Full Article: Source

Deutsche Bank has appointed Fahad Albader and Adel Dagher as co-heads of its asset and wealth management coverage for the Middle East and North Africa (MENA), eyeing business from sovereign wealth funds and family firms in the region.
Middle Eastern sovereign wealth funds, including the likes of Abu Dhabi Investment Authority (ADIA) and Kuwait Investment Authority (KIA), hold about $2 trillion in assets, luring large global banks and asset management firms to the region who are seeking a share of the business………………………………………..Full Article: Source

Over 2000 administrative employees of companies within the Samruk-Kazyna Sovereign Wealth Fund will be laid off in 2013, the Fund announced. Samruk-Kazyna keeps on its effort to optimize the structure of its administrative pool of employees. 2356 administrative employees will be made redundant in 2013, according to the Fund’s statement.
Back in 2012 a total of 2210 employees were made redundant, notably 588 employees of KazMunaiGas Oil and Gas Company, 400 employees of Kazakhstan Temir Zholy National Railways Operator, 235 employees of KazAtomProm National Nuclear Company, 286 employees of Kazakhtelecom and 701 employees of other Fund’s subsidiaries………………………………………..Full Article: Source

Khazanah Nasional Berhad is looking at impact investing in a bid to create social and environmental benefits in its projects. Impact investing is investment made in companies, organisations and funds with the intention to generate measurable social and environmental impacts alongside financial returns.
Khazanah managing director Tan Sri Azman Mokhtar said yesterday it is scaling up its Trust School programme, which has seen 10 national schools selected for a pioneer project to help improve teaching and learning………………………………………..Full Article: Source